On September 18, 1967, KE Reactor experienced,a failure in a K5E fuel element in tube 2863, exposure 634 Mwd/t. On September 24, 1967, two additional failures occurred. All of these elements, clad with X8001 alloy were from the same canning lot. All fuel elements from this canning lot were termed rupture-prone and were discharged. The elements from five columns including column 2863, but neither columns 2865 nor 3256, were sent to 105-C Basin Fuel Examination Facility for further examination. An incipient failure was found and sent to Radiometallurgy in an effort to determine the cause of failure. During the course of examination, the spire was found to contain beehive-shaped growths approximately 1/8-inch high and 1/8-inch 9 in diameter at the base. The incipient failure contained four of these growths protruding from the spire wall. Closer examination showed that the spire contained numerous other ``beehives`` in less advanced stages of growth. The ruptured element from 2863 also contained a ``beehive``. The second section of this report covers examination of several ``beehives`` and presents information concerning the possible cause or causes of growth.